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Government Contracting and Certification – What It All Really Mean?


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SBA.gov Community
Created on June 30, 2014
 

SpotlightOriginally posted at SBA.gov Community

“Government contracting.” “Small business certification.” You’ve heard the phrases before, but what do they really mean? And does it really matter for your small business? Maybe – and maybe not. Let’s cut through all the noise and define these phrases in a meaningful way for your entrepreneurial endeavors.

What is government contracting?

Government contracting is the process that lets you sell your goods or services to the government and its various agencies. The government has a contract, or agreement, with you whereby it purchases what you do or make. And U.S. government agencies buy a lot from small businesses – nearly $100 billion worth of goods and services each year! From market research to janitorial services, if you want to make the government your customer, there’s a good chance there’s a need for what you offer.

So, what does it mean to be certified as a “small business”?

Being certified as a “small business” is only significant if you’re interested in government contracting. Why? Because there are certain set-asides that the government must adhere to when they’re looking to buy goods or services – there’s a percentage of business set aside for different kinds of companies, including small businesses. (Others include women-owned, veteran-owned, etc.) So if you want to be a contender in the federal marketplace, your small business has to meet official criteria to be eligible for government contracts.

How do I certify my business as small?

First, make sure you do, in fact, have a small business. For most industries, SBA defines a "small business" either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years.

Then, when you know you adhere to the size standards, you register for government contracting. This process also serves the purpose of “certifying” your business as small.

Where can I get some help?

Starting out in government contracting can be overwhelming, but SBA has resources to help:

Did you know...

Between 2002 and 2007, minority-owned firms outpaced the growth of non-minority firms in gross receipts, employment, and number of firms. Minority firms are an engine of job creation.
Graph for MBE Growth

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